Ygrene Completes $315 Million Securitization Of PACE Assets
November 20, 2019
Leading PACE Provider Securitized over $500 Million in 2019 as the Company Continues to Bring the Most Diversified PACE Transactions to Market
(Petaluma, Calif.) - Ygrene, the nation's leading Property Assessed Clean Energy (PACE) provider, today announced the completion of a $315 million securitization transaction of residential and small-balance commercial PACE assets (GoodGreen 2019-2). The transaction's Class A notes achieved AAA ratings from Kroll Bond Rating Agency and DBRS, Inc. All of the notes received a Green Bond rating from S&P Global Ratings, with high ratings for governance and climate change mitigation. Building on its $225 million GoodGreen 2019-1 transaction in January, Ygrene has now securitized more than $500 million of Green Bonds this year. This transaction was Ygrene's ninth securitization, building upon a track record of issuances that have helped to deliver highly-rated ABS notes to investors in support of critical climate change initiatives – from reducing CO2 to enabling adaptation to stronger hurricanes.
"This securitization round demonstrates the bright future that lies ahead for PACE financing," said Greg Saunders, Ygrene's Chief Financial Officer. "Investors continue to demonstrate their confidence in PACE, as it remains one of the most secure options in the home improvement financing industry while underscoring investor's appetite for investments that actually help society."
Ygrene has a longstanding history of issuing some of the most diversified PACE transactions in the industry. GoodGreen 2019-2 is comprised of a portfolio of small-balance commercial and residential PACE assets in California, Florida, and Missouri. Its notes had the lowest Class A interest rate of any PACE asset-class securitization, with its 2.76 percent rate far below the previous-low rate of 3.10 percent.
Michael McCormick, Ygrene's Director of Capital Markets noted, "GoodGreen 2019-2 was Ygrene's first transaction in approximately two years that involved the issuance of a standalone Class C bond, garnering strong investor demand. In addition, this securitization was the Company's first transaction with notes rated by DBRS, a leading global credit rating agency." The proceeds from the transaction have been allocated across thousands of properties for vital improvements related to energy efficiency, solar, water conservation, and resiliency measures that help homes and businesses protect their properties from the ravages of hurricanes and fires. PACE has evolved from its early days of reducing carbon emissions, to helping communities adapt to the increasing peril of climate change.
"The market is recognizing that communities need a program like PACE," added Saunders. "We look forward to continued success in working closely with local and state politicians to help their communities become more environmentally sustainable, and to grow stronger in the face of more powerful natural disasters. Empowering home and business owners to protect their properties through projects financed by PACE is of the utmost importance."
Through public-private partnerships, PACE has become a crucial engine for spurring local economies and a reliable source for local lawmakers to grow their tax base at no cost to municipal budgets. Through PACE, Ygrene has helped create more than 32,000 jobs, injecting more than $1.7 billion into local economies, according to a report from the University of Southern California Schwarzenegger Institute for State and Global Policy. USC's Schwarzenegger Institute also found that Ygrene has helped homeowners save more than $1.2 billion in lifetime insurance premium savings, as well as another $1.2 billion in lifetime utility bill savings. Ygrene and PACE are also playing a crucial role protecting our environment, reducing lifetime CO2 emissions by more than 1.7 million metric tons and conserving more than 3.4 billion gallons of water.
PACE-enabling legislation has expanded into 36 states and the District of Columbia, helping to support energy efficiency jobs in communities across the country.
Ygrene’s award-winning PACE program, with built-in consumer protections, is delivering greater choice for home and business owners by providing accessible and affordable financing for energy efficiency, resiliency, renewables, water conservation, storm protection and seismic upgrades. Recognized as one of the fastest growing asset classes in the country, PACE has proven to be a successful tool for supporting public policy initiatives, all without the use of public tax dollars or credits. By providing over $1.7 billion of private capital to more than 550 local communities, Ygrene has created tens of thousands of jobs and invested millions into local economies across the U.S. Learn more at ygrene.com.